Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 19 - No. 8)
What is the purpose of calculating the 'rate of inventory turnover'?
To measure how quickly a business buys and sells inventory.
To determine the total sales revenue.
To determine the average inventory level.
To calculate the cost of goods sold.
Explanation
Inventory turnover measures how rapidly a business's inventory is sold, and is useful in tracking inventory, and helps manage purchasing
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